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Lacker´s “homily”

Given the performance of the economy and very robust improvements in the job market, “June has to be on the table,” Mr. Lacker told a SiriusXM satellite radio program. He explained that as long as the economy meets his expectations, “June would strike me as the leading candidate for liftoff” in moving short-term interest rates off their current near-zero levels.

Mr. Lacker was upbeat about what he saw in the jobs report, which showed that the economy added 295,000 jobs during a drop in the unemployment rate to 5.5%.

“It was a very good report, very strong and consistent with last month, and consistent with the picture we’ve been getting over the last year of the significant improvement in labor market conditions,” Mr. Lacker said. Broadly speaking, the data shows “the willingness of people to say, ‘Take this job and shove it,’ and move on to take a chance on a new position” in pursuit of higher wages, with the confidence that if it doesn’t work out, a better job can be found, he said.

You could say the report was“good” regarding the drop in the unemployment rate. But “strong”? If people are leaving the labor force the unemployment rate will come down. How “strong”, then, were the reports when unemployment was falling but the labor force participation rate was on the rise? Then, people were much more likely to do the “shove it” routine!

And Lacker´s “funny” aside:

The official also indicated that he favors moving away from the Fed’s current pledge to be “patient” with rate rises, saying he’d like the wording to be struck from the FOMC statement in order to give officials more flexibility to respond to economic data.

Translation: “Let´s increase rates now so that we will regain the option of being able to reduce them later”!